diff --git a/lib/virtual-fs.js b/lib/virtual-fs.js
index 74a8602..619d404 100644
--- a/lib/virtual-fs.js
+++ b/lib/virtual-fs.js
@@ -16,7 +16,7 @@ class VirtualFileSystem {
 
     if (encoding) {
       // return a string
-      return typeof data === 'string' ? data : data.toString();
+      return typeof data === 'string' ? data : data.toString(encoding);
     }
 
     return new Buffer(data, typeof data === 'string' ? 'base64' : undefined);
diff --git a/tests/unit/virtual-fs.spec.js b/tests/unit/virtual-fs.spec.js
index 2c4f7d5..3a4611d 100644
--- a/tests/unit/virtual-fs.spec.js
+++ b/tests/unit/virtual-fs.spec.js
@@ -13,6 +13,17 @@ describe('virtual-fs', function() {
     fs.fileData = {};
   });
 
+  test('readFileSync', function () {
+    checkMissingFiles(['encoded', 'raw', 'binary']);
+
+    fs.bindFileData({
+      'files/binary': Buffer.from('Buffer content'),
+    });
+
+    const base64Data = fs.readFileSync('files/binary', 'base64');
+    expect(base64Data).toEqual('QnVmZmVyIGNvbnRlbnQ=');
+  });
+
   test('writeFileSync', function() {
     checkMissingFiles(['encoded', 'raw', 'binary']);